Portland, Oregon, is the most entrepreneurial town in the world

It seems there’s a bit of contention and kerfuffle about a recent Entrepreneur piece on the most “startup friendly cities in the US.” Why? Because Portland—and a number of other “not seen as startup hub” towns—made it to the list while traditional metropolitan juggernauts—like Boston, New York, San Francisco, and Seattle—were left by the wayside.

I read John’s post last night. My first thought? Was this just a case of sour grapes?

But after reading through it a couple of times, I don’t think it is. Because I agree with him on any number of points. So I wasn’t really going to jump at his good natured baiting—even though Entrepreneur was clearly baiting all of us—because I didn’t take any severe umbrage with anything he said. At all. All fair points. And I didn’t really have anything to add to the conversation.

And suddenly, it dawned on me. Somehow, as I was reading both pieces, I slipped into thinking about the how the Entrepreneur piece related to the tech scene in Portland. Probably because I was reading two of the best tech blogs in the Northwest. I’m silly like that.

But then it dawned on me: the Entrepreneur piece is about entrepreneurs. Not tech startups.

And that, my friends, is where I’m going to make my distinction. And that’s why I’m sure that Portland belongs on the list of most startup friendly cities.

Why? Cost of living and way of life aside, it’s for one simple reason. Portland belongs on that list because it’s got one of the most diverse entrepreneurial communities I’ve ever seen. And I’m not even going to tack Portland’s omnipresent “per capita” qualifier on there. That’s most entrepreneurial community, period.

And with a full head of steam, I started banging out my post. But then I stepped back.

Maybe I don’t know what the hell an entrepreneur is, I thought. Maybe I don’t know what the hell I’m talking about. Maybe they’re absolutely right and I don’t have a horse in this race.

And then, after a few moments of rocking myself in fetal position at that thought, I returned to the keyboard.

I wanted to make sure I actually had the correct understanding of the term “entrepreneur.” I mean, it’s not Entrepreneur’s list of “friendly to tech startups” or “successful liquidity events,” is it?

And while I hate to pull out the old hackneyed “definition” card, I am old and hackneyed, so let’s take a look, shall we? Just so we’re on the same page.

According to Wikipedia, “An entrepreneur is a person who has possession of an enterprise, or venture, and assumes significant accountability for the inherent risks and the outcome.” Dictionary.com says it’s “a person who organizes and manages any enterprise, esp. a business, usually with considerable initiative and risk.” And my trusty Mac dictionary widget says it’s “a person who organizes and operates a business or businesses, taking greater than normal financial risks in order to do so.”

Don’t like those definitions? Well, pick any one of these takes on the word “entrepreneur.”

Entrepreneurs take a risk to start something up. And Portland is pretty well chock full of those types. Tech or otherwise.

And to me, being entrepreneurial and being a business person capable of leading an organization to a liquidity event are often two completely different things. Ask anybody in Portland, and they’ll rattle off two or three side projects. That’s entrepreneurial spirit.

But—but!—that’s not business. And that’s something with which every entrepreneur struggles: You might not be the right person to make your idea a successful business. Heck, you might not even be the right person to turn your side project into a startup.

And if Portland doesn’t prove that, I’m finding it hard to think of a town that would. But that doesn’t make Portland any less of a haven for that entrepreneurial spirit.

Second, I reminded myself, this was a list of companies that are friendly to entrepreneurs.

You see, this may come as a shock to you—I know it does to me—but there are actually other kinds of entrepreneurs. Yes, yes, tech is the entrepreneurial darling. And clearly I love droning on and on about it. But in actuality, Portland has an amazingly diverse and rich entrepreneurial fabric running through the city.

I mean, c’mon, I said to myself. It wasn’t even a tech company that was profiled in the piece. The entrepreneurial company representing Portland? Wicked Quick, an Portland startup apparel company.

As much as I hate to admit it, being an entrepreneur is about more than hacking some sweet APIs together and getting Sand Hill Road to kick in some development funds. And it’s that entrepreneurial diversity that makes Portland entrepreneur friendly.

Some examples?

Every food cart in Portland from Whiffies to the latest cart opening today is an entrepreneurial venture. And if Food Carts Portland is any indication, the city is pretty damn friendly to those entrepreneurs.

Everyindependent coffee shop and barista that starts boiling water under their own shingle here in town is an entrepreneur. And if this list of coffee shops doesn’t hint at how many of those there are in town

Everycoworking space in town—whether it makes it or breaks it—is an entrepreneurial venture to support other entrepreneurs. That’s like entrepreneurial friendliness squared.

Portland is a beer town, and every craft brewing and distilling operation is the entrepreneurial spirit of Portland. Some of those even grow into successful franchises or regular watering holes. But all of them—even the batch you’ve got brewing in the garage—is that entrepreneurial spirit.

The same thing goes for every single restaurant in Portland. I can’t think of any single entrepreneurial pursuit that carries with it more of that entrepreneurial risk factor than restaurants. And Portland’s got a ton of them.

The one place that Portland has focused—the clean tech and green tech scene—is rapidly becoming our claim to fame. And that’s one of the few areas that’s actually getting the funding and support it deserves.

Sure. Nike and Adidas passed out of the “startup” scene long long ago, but every single apparel company—from rock stars like Keen and Wicked Quick to crowdsourcing Ryz to tumultuous pursuits like Lucy and where are they Nau—is a Portland entrepreneurial story. And one of the few regions in the world that boasts as much entrepreneurial talent in that regard. Even Rudi and Adi would be proud.

Every single public relations and marketing communications consultancy—from brilliant small shops like Maxwell PR to corporations like Waggener Edstrom, who just so happens to handle all the PR for that little company over in Redmond of which Seattle is so proud—are examples of Portland entrepreneurs succeeding in this environment and supporting clients all over the world.

And that marketing work has translated into an environment where every singlegraphic design artist in town is entrepreneur, whether living on their own work or working inside an agency and finding time to pursue side projects.

Of course, I would be completely remiss without mentioning the classic example of Portland entrepreneurship sans profit—open source. To me, there’s nothing more entrepreneurial than having the gumption and wherewithal to identify a problem and fix it. And Portland’s open source community is all about that. Not to mention all of the successful projects—and in AboutUs‘ and Jive‘s cases, funded projects—based on the use of and development of open source platforms.

And last but not least, Portland is one of the bloggiest towns anywhere. And each and every blog or podcast a Portlander starts is another example of that entrepreneurial spirit taking root.

And that’s nothing to say of the burgeoning music, art, and creative writing scenes. All entrepreneurial pursuits in their own right.

And guess what? Practically every one of those pursuits above? They’re supported by other entrepreneurs. By frequenting establishments. Or using their code. Or buying their products to help them with their own startups.

So friendly to startups and entrepreneurs? Who knows? But there are certainly a ton of people embracing that entrepreneurial spirit—in thousands of different ways. And there’s a cooperative community that helps all of that happen.

But see, that rampant diversity will also be one of the reasons why Portland doesn’t land on these types of lists without a lot of scoffing. Because, beyond the whole green and clean tech thing, we’ve put far too little effort into focusing as being the hub of X. Especially in tech. And that’s the real problem here—and the reason calling “WTF?” on the Entrepreneur listing has its place—finding our niche or niches that will help that thriving entrepreneur vibe transition into a successful business community.

So yes, John, and yes, Mike, financial comparisons or IPO comparisons make the list look a little off or the metrics skewed. But there is something else happening here that isn’t played out in those metrics. Something I hope John swings by to see and I hope Mike keeps covering. Something is happening. Something cultural. Something about Portland and its residents.

And maybe none of these entrepreneurial startup efforts will amount to a hill of beans. Or create millionaires. Or even solve any problems. But that doesn’t make them any less entrepreneurial. Nor does it make Portland’s community any less friendly to those entrepreneurs.

There’s a reason Portland is on that Entrepreneur list. Portland is the most entrepreneurial town in the world.

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Published by Rick Turoczy

More than mildly obsessed with the Portland startup community. Founder and editor at Silicon Florist. Cofounder and general manager at PIE. Follow me on Twitter: @turoczy
View all posts by Rick Turoczy

@Brian Yes, the unemployment numbers are high. In all honesty, that’s likely fueling entrepreneurial pursuits, as well. With jobs being scarce, people are taking the opportunity to venture out on their own.

That said, a number of tech companies in town seem to be hiring again/still.

My wife and I have been considering places to relocate to and Portland seems awesome in many respects. One thing that is very concerning right now though is the high unemployment rate (>11%) in Portland. Can you speak to that at all?

A lot of interesting points made. But anytime there’s a “best city for…” article its always contingent on what criteria the author comes up with. Especially when measuring is somewhat intangible like “Best City for Entrepreneurs” vs. something like “Cities with the lowest crime” which can be measured with certainty. You’ve definitely peaked my interest though. Must visit Portland.

I don’t buy your “most entrepreneurial town in the world” label. When I was a member of the Georgia Entrepreneur Society most of the startups that were members were not tech startups. You seem to have an implicit assumption that other cities are not overflowing with the kinds of ventures you’re talking about Portland having…but they are. That’s why tech startups get used as a barometer for entrepreneurial activity. In most places there are so many of these other ventures you can’t reasonably count them. I live in Boston now and I routinely meet people who own two or three independent businesses.

I think you’ll find the reason people who have been to Portland scoff at it is that Portland doesn’t support the density of people and academic institutions that generally make it easy to start businesses and succeed.

I love this piece. Exactly why I like to read Silicon Florist. And given that I’ve changed my mind about what I think about this a few times since I started reading (and following all the great links–thank you), I can see how there’s a lot of debate around the subject.

The way I see it, Portland is full of people with great ideas who don’t really want to take on a lot of risk. They want lifestyle companies. Ones where they can do what they love, cover the expenses of their modest lifestyle, perhaps augmenting the family income which really comes from a spouse’s stable corporate job (with bennies). They don’t even want to get bought, necessarily, and even the bigger ones debate the benefits of going public. Most of all, they want to be in control of their own destiny.

This is why we see so many small companies spring up in downturns. Like Phrank says, many become consultants, perhaps picking up a loose group of partners along the way, because there simply aren’t any jobs. And sometimes those ventures grow into something that really has legs and can employ a handful of people. Once in a while they get bought by a larger competitor. But more often, they eventually disband and the people start over somewhere else.

By the definitions you site, and perhaps John Cook’s definition, these company owners almost wouldn’t qualify as entrepreneurs. But I don’t agree. They are. They just have a slightly lower tolerance for risk, and a much lower tolerance for sacrifice and burnout.

And they’re not going to attract big capital, because they don’t really want it, mainly, in my opinion, because they don’t want all the obligations that go with it, whether they admit that or not. And because we are such a cooperative culture that places a high value on “buying local” it’s very easy to find partners and friends who will introduce you to or share customers. (Of course, this is for service companies. Products are different.)

But not everyone feels this way. Jive doesn’t, and I’m sure they’re not the only ones. And while Lizzy Caston (who is a treasured friend that I adore and respect) is frustrated with the lack of government support, I’m wondering if it’s fair to put all the blame there. It seems that most of the entrepreneurial community is here because they like the vibe of the city (good transportation, good downtown planning, a general commitment to livability) so perhaps that’s what they should concentrate on. Now I don’t totally believe that, but I do wonder if we in the business community give the city enough incentive to invest in us, given that we could really use more larger companies. (Lizzy, feel free to chime in here and tell me why they should. I’m sure you can talk about our ridiculous tax structure here, too. 😉

We’re going to see a lot more small, passion and lifestyle companies in the next two years, for all the same reasons we saw them spring up in 2000 – 2003: there aren’t enough jobs and there’s a great network of people to cheer you on. So do we deserve to be at the top of that list? Yes, I think so. I just don’t expect that we’ll start creating entrepreneurs with that “killer instinct.”

So i’m a developer, started companies, etc.. I’ve lived in Boston, and San Francisco where i’ve had companies.

Now i’d love to go and live in portland, it seems really cool. There’s a smallish tech scene. But one look at the job listings, even adjusted for population, and you can see that it’s not a center of startups.

Nice place to live, sure. Cheaper than SF, sure. But there’s no critical mass.

If i did have a company there and sold it, it’s most likely to be moved to seattle or san francisco after the sale. That’s because there is no critical mass. A company in boston or san francisco dosen’t get moved after they are acquired. Companies from Portland do.

Which is not to say that it’s a bad thing. If portland were to be that center, then housing prices would double, driving up the cost of everything else. There would be tremendous pressure to create endless suburbs to make portland to eugene one large metropolitan area.

Kristin said: “My question is this: Why is it so hard to be pleased with a compliment around here? Given the times, it seems more productive to be positive about the possibilities rather than gripe about what’s not right.”

Interesting. So you think it’s griping to point out some history and some of the realities of our situation? It seems like we’ll never improve if we want to always “be positive about the possibilities”. There’s a time for being positive and there’s a time for honest reflection.

Personally, I like it here. I think we do indeed have a lot of things in our favor. But I also try to not get stuck in the mindset that says that we’re the only people doing these things or the only city that’s working towards certain goals – I think if we get stuck in that self-satisfied (“we’ve arrived”) mindset we’re 1) closing ourselves off to other possibilities and 2) not going to see what hit us when some other area decides that they really want to excel in our core competencies.

I think Portland does have a strong supply of entrepreneurial spirit. All of the peripheral services in place are not perfect, but I do think this town is making moves in the right direction and at a much quicker pace than most. It’s about positioning for the future to be competitive with metro areas much larger than our own.

My question is this: Why is it so hard to be pleased with a compliment around here? Given the times, it seems more productive to be positive about the possibilities rather than gripe about what’s not right. Feels like Congress 🙂

I think Phrank’s perhaps missing some of the more subtle trade-offs that make an area great for entrepreneurs. Portland may not be the cheapest city, but I’d argue that it is the cheapest and most livable city on the West Coast. Portland’s proximity to powerhouse markets like Seattle, SF, LA, and its local community of diverse and talented creatives (national caliber, in many cases) make it a unique and powerful launchpad for the next generation of tech startups … startups in general, let’s say. 🙂

But this highlights how narrow the definition of “success” can be for some people. As is emerging from this discussion, it’s not always about VC money raised, or exits. Ask anyone around PDX if the vibrant restaurant scene here matters. It does, regardless of whether you work in the restaurant biz. It matters because we all literally get to taste of creativity, and experience the excitement of something new, something daring and risky.

That’s a community spirit that Portland has in spades. I’d argue that at least for the foreseeable future, we’re done dealing in IPOs and big flashy exits. And in the new environment of smaller more nimble companies, that community spirit becomes more important than ever in sustaining a successful entrepreneurial environment.

“Two, I realize Portland isn’t the only town focusing on green/clean tech. But that is the one pursuit into which the City of Portland has put a great deal of time and effort. They WANT to be seen as the hub of Clean/Green so they’re pumping time and dollars into that space.”

Yeah, well, 8 to 10 years ago Portland wanted to be known as a biotech hub too and they poured tens of millions of dollars into that and as a recent Willamette Week article showed, there’s very little to show for it. I expect the green/clean tech thing to work out similarly (sorry if I sound cynical, but I’ve been around here long enough to see how these things work out). Wants and reality often don’t match up.

California is also pouring a lot of resources into attracting green/clean tech. And I imagine that when Ahnold goes to China to talk with the money folks there he gets a lot more attention than when our gov goes over. Other states are courting these industries as well.

“Three, entrepreneurial by necessity is a great classification. I’d throw in that a lot of people move to Portland without a gig. And that fuels that whole thing, as well.”

Possibly, but here’s what I notice about a lot of folks I meet recently who have moved here without a gig: they don’t have a lot of resources. You need to be able to have enough living expenses on hand to last for about 2 years if you really want to make a go of it with a startup (and that’s in the web/software space where capital expenses are very low). Some of these folks just decided that Portland sounded cool so they figured they’d move out here to try to make a go of it… well, that’s a very bad plan at the moment. And in a lot of cases these folks only have a few months of living expenses. I feel for a lot of these folks: they’ve been fed some hype and now they’ve made a big mistake that will hurt them financially for some time to come.

Maybe that’s partially why I responded to your article: let’s tone down the Portland-is-the-greatest-place-evar! hype – people are getting hurt.

I moved to Portland in 1986 from the Midwest, and I’ve seen the city go through a lot of changes. One thing that’s remained consistent is the creative spirit here. Before everyone used computers or had heard of the Internet, that creativity manifested itself more through the local arts scene, like the fantastic Portland independent music community, the local zine and comic creators, and businesses like Powell’s Books.

Now that same, independent energy has created a very strong tech community, and I think it’s no coincidence. In fact, many professional geeks that I know have some sort of creative outlet outside of their tech work, like photography, music, or writing.

All of these things are related. I have no doubt that people in the tech community are inspired by the work of people in the arts and other areas, and vice versa. Creative people come to Portland or stay in Portland for the great quality of life our city offers. I have yet to seriously consider relocating, since I moved here 21 years ago, and I don’t expect it to happen anytime soon.

I think we may want to start looking at Portland as an entrepreneurial incubator. Those incubator activities may not show up in lists, or in a larger, more visible way (as in local dollars spent/X dollars of revenue generated) – but they’re lurking behind the scenes nonetheless, fed by all (or most) of the factors you reference above.

I can think of a few examples over the years from my own personal history here in PDX that illustrate this point – from small local company City.Net’s acquisition by Excite back in the late 90’s (you’re now all saying ‘City-who?’, I’m sure) to Pete Grillo’s former startup WeSync’s acquisition by Palm in 2002-03 range, to name just two. You only really knew of them if you knew the players personally, or followed that industry/organization. Yet the technologies (and in some cases employees) live on – they’re just subsumed into products or services that are now based elsewhere. I’m sure others have other good examples.

And in fact, Intel itself makes my point as well – Intel the corporate behemoth was incorporated in California, reincorporated in Delaware, is headquartered in CA, yet still employs hundreds of local Oregon employees, for instance. While they may not be on any official list or radar – we all know the kind of impact Intel’s presence has had in Oregon.

Next, there are other entrepreneurs operating locally that just don’t show up on a ‘local’ radar. They’re privately held, for example. Don’t provide information to lists, don’t see a need to market themselves locally, or don’t see a local market as their target for future customers.

Finally, we just don’t have the typical ‘self chest-puffiness’ behavior seen in other large metropolitan areas – at least, not in my experience, anyway (which is rooted after living in the go-go’90’s in both NYC and Silicon Valley.) We’re typified instead by the ‘just get it done’ ethic, coupled with a self-deprecation or an inability to crow endlessly about our accomplishments (instead, we cock an eyebrow when we feel bombarded by incoming hype.) In other words, we tend to show more quiet substance than self-promotional style.

@Phrank First off, awesome comment. Thank you for taking the time to write that. I wanted to touch on a couple of things.

One, I’m convinced there are innumerable communities in the US and around the world exactly like Portland that don’t get the credit they so richly deserve. Austin, Boulder, New Orleans, Omaha… the list goes on and on. I would love to see bloggers hammering out posts about why their startup environment is so great. Because they’re doing some things better than Portland, I can guarantee. And I’d love to hear what those things are.

Two, I realize Portland isn’t the only town focusing on green/clean tech. But that is the one pursuit into which the City of Portland has put a great deal of time and effort. They WANT to be seen as the hub of Clean/Green so they’re pumping time and dollars into that space.

Three, entrepreneurial by necessity is a great classification. I’d throw in that a lot of people move to Portland without a gig. And that fuels that whole thing, as well.

Sure, it costs less to live here than it does in Silicon Valley. But it’s not a whole lot cheaper here than Seattle. And it’s certainly more expensive to live in Portland than it is to live in places in the MidWest, rust belt or the South – houses are still quite expensive here (in fact there are now places in So Cal where houses are at or slightly under Portland’s prices because they’ve been falling down there for longer).

OK, then you go on to enumerate all of the entrepreneurial ventures going on around town, and yes, there are a lot that would fit in that category, but, part of me wonders if you’re not also getting a bit too enamored with the town and missing the fact that many other areas of the country are also becoming this way. Some blogger in Austin could sing the praises of that city and it would look similar to what you’ve written here. Green and clean tech? You think we’re the only state/metro area in the country that’s trying to court that industry – in fact Detroit is starting to get a pretty good green tech industry going, and why not, they’ve got all that manufacturing experience left over from the auto industry, empty factories and jobless auto workers.

Let’s face it, part of what makes Portland entrepreneurial is necessity: When things get bad here they tend to get really bad (I can remember every recession here going back to the mid-70’s and it’s always been that way here). You either have to be able to wait it out or move to someplace like Seattle or Silicon Valley. The other option has always been to try to start some kind of venture so you could try and stick around. Personally, if I found myself laid off next tomorrow I’d try to start some kind of software venture. The odds are, of course, against me, but at least I’d have something to show on my resume when hiring picks up again… and if by some miracle it did work out I wouldn’t expect to get rich – just to have some kind of income stream that meets my needs.

Lists are great, for marketing and PR purposes. But something missing on this list? Where’s the money and other support to take these fertile start up conditions and translate them into an actual long term, sustainable economy of tech, “green” and other businesses?